Comments on: TICs, San Francisco’s Involuntary Reflex: Part 1

By: Noe Valley: The Condo/TIC market | Real Data SF

Noe Valley: The Condo/TIC market | Real Data SF — Thu, 01 Apr 2010 22:43:47 +0000

[...] Note that there were more than twice as many condos sold as TICs, and more homes sold than condos and TICs put together. (What’s a TIC? — Check out my series of posts on Tenancy-In-Common Interests, starting here.) [...]

By: Misha

Misha — Sun, 13 Dec 2009 20:02:18 +0000

I guess that depends on whether you view the majority of TIC transactions as being “new” or buying into existing TIC arrangements. I haven’t done the numbers on this one, but my impression is that the majority of TIC sales are into existing TIC arrangements.

In any event, as you know, if you use fractional financing which is a much better way to go, you’re going to pay an interest rate premium for the privilege.

By: Brian Birney

Brian Birney — Sun, 13 Dec 2009 18:46:14 +0000

Misha, you wrote, “…when you buy a TIC, in the vast majority of cases you and your co-owners become co-signers on a loan for the entire building.” I believe this is incorrect. Most NEW TIC formations use fractional loans. 2 unit TICs oftentimes use a blasnket mortgage because they expect to covert quickly. Occasionally, 3-unit TICs use a blanket mortage because they believe that, with the small number of mortgagees, the liklihood of a problem coming up is low enough (bad math?) that it is not worth getting a fractional mortgage. The rest almost always get fractional loans nowadays, assuming the building qualifies. And that qualification is, btw, a statement of how sound an asset the bank feels the building is (something to comfort buyers and sellers in such buildings).

Thanks for shedding some light on what many find to be a confusing subject.

By: marc meyer

marc meyer — Sat, 07 Nov 2009 15:00:25 +0000

misha, i’ve been looking for just this kind of explanation, thanks!

By: Jean-Claude

Jean-Claude — Wed, 04 Nov 2009 21:24:15 +0000

Thanks for this concise post about TIC’s it’s always great to know more about SF’s strange world of real estate and TIC’s are in that peculiar world where getting decent information is always fraught with bias.